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Novell Rejects "Inadequate" $2B Takeover Bid

timothy posted more than 4 years ago | from the come-back-with-a-real-offer dept.

Businesses 111

alphadogg writes "Novell's CEO wrote to customers Saturday telling them that the software company has rejected a $2 billion bid by hedge fund Elliott Associates to take it private. He called the offer 'inadequate' and said Novell will review alternatives. Novell has struggled financially even as it has reinvented itself from its NetWare network operating roots into an open source (SUSE and Ximian) and management and security software company. Revenue fell 10% during its most recent fiscal year (wrapped up in October) and its net losses widened. CEO Hovsepian's total compensation fell 17% to $5.7 million."

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111 comments

First takeover post! (1, Insightful)

Anonymous Coward | more than 4 years ago | (#31554774)

I now own 20% of all first posts!

Somewhere... (0, Interesting)

Anonymous Coward | more than 4 years ago | (#31554780)

Holy crap! they offered 2 billion to buy us out? We're not even worth half that!

I know right! They must be insane....... I bet we can get 5 billion!

Re:Somewhere... (5, Informative)

tomhudson (43916) | more than 4 years ago | (#31554844)

Holy crap! they offered 2 billion to buy us out? We're not even worth half that!

... almost a billion in cash in the bank and no debt. They're worth more than 2 billion.

Re:Somewhere... (3, Informative)

ragnathor (955771) | more than 4 years ago | (#31555024)

Holy crap! they offered 2 billion to buy us out? We're not even worth half that!

... almost a billion in cash in the bank and no debt. They're worth more than 2 billion.

They most definitely do have debt. http://finance.yahoo.com/q/bs?s=NOVL [yahoo.com]

They don't have "long term debt" but over $800 million in liabilities, $600 million of which has to be paid within a year. So yes, a billion in cash, but plenty of debt as well.

Re:Somewhere... (5, Informative)

gordguide (307383) | more than 4 years ago | (#31555212)

Liabilities are not debt.

They are the short term costs of doing business, and will be reflected in next year's financial statements as being fully paid out of operating revenue.

Debt is simply that ... money you borrowed and will have to pay back some day.

Examples of liabilities are ... employee wages, rents, utilities, paying the contractor who painted your office building, invoices for product delivered (last week) but not yet paid for (once every 30 days, etc), etc. Another (Big) example is shareholder's equity. That is money you technically owe, but never have to pay; if the stock goes to zero there is no payment required to cover that.

It's ongoing business accounting, with the payment coming out of your ongoing sales.

Re:Somewhere... (3, Insightful)

ragnathor (955771) | more than 4 years ago | (#31555294)

No, liabilities will be paid with by the company's cash, which theoretically will be replaced by next year's operating revenue. However, If Novell were to stop all operations today, it would have to pay the liabilities it already owes (wages, rent, utilities, invoices, etc.) with it's own cash, BEFORE any money would be paid to shareholders. The same is true if they had any debt. Any liabilities listed are for services or products (employee wages, office supplies) that Novell has already received but not paid for.

Correct that liabilities are different from debt, but you still "owe" either one. My point was that saying "one billion cash with no debt" is misleading. If you're talking about cash the company has in terms of its financial health, you have to mention its liabilities as well.

I'm not sure whether or not you meant that shareholder's equity is a liability, but the two are completely different. You don't pay back shareholder's equity, but you DO have to pay back liabilities.

Re:Somewhere... (1)

Jurily (900488) | more than 3 years ago | (#31555870)

It's ongoing business accounting, with the payment coming out of your ongoing sales.

Assuming you have sales, which might not be the case for them in a couple of years.

Re:Somewhere... (1)

the_womble (580291) | more than 3 years ago | (#31555974)

The distinction you are trying to make is between debt capital (e.g. bonds, long term bank loans, any thing else that is financing) and other liabilities. Shareholders equity is not shown as a liability, and is not connected to the share price.

The number you want is net assets [moneyterms.co.uk], but it is not really relevant to valuing a company link Novell except for establishing a floor to the valuation.

You may need a sum of parts valuation [moneyterms.co.uk] (I am not sure how diverse Novells businesses are), but a simple profit multiple may do.

Novell's management have got some key shareholder backing for rejecting the offer, so they are not the only ones who think they will get more.

Re:Somewhere... (1)

DesScorp (410532) | more than 4 years ago | (#31555128)

Holy crap! they offered 2 billion to buy us out? We're not even worth half that!

... almost a billion in cash in the bank and no debt. They're worth more than 2 billion.

Are they? Isn't their market share fast declining? For all of the mocking that Sun received prior to their buyout, they had the benefit of not only software that was actually selling, but hardware as well. Novell chucked their own OS over the fantail and basically sells Linux with commercial support now. Billion in the bank or no, they haven't stemmed the loss of mindshare with the SuSe acquisition. If that was supposed to change their fortunes, it failed.

Re:Somewhere... (1, Interesting)

Anonymous Coward | more than 3 years ago | (#31556908)

Netware is declining yes, but SLES/SLED/OpenSuse is still one of the top distros in download numbers. A quick peek at their financials will show you that they actually grew their linux sales by about $13million in the last year - not too bad in a crappy economy.

Re:Somewhere... (1)

timmarhy (659436) | more than 4 years ago | (#31555244)

no they aren't. they are worth 1 billion + any assets. the rest is good will, of which they have about 20c worth.

No. (1)

symbolset (646467) | more than 4 years ago | (#31555378)

Novell owns the copyrights to Unix. That's $4B right there. Once their court case is over and they're cleansed of the SCO debacle [groklaw.net] Unix will see a resurgence and Novell will ride it for all it's worth. Don't count them out yet - the jury will come back in a week or two. Unix has some serious proper respect in the geek community, and in the business community that has been deferred due to these ridiculous legal actions. Once they're over, they're over and Unix will reclaim its rightful place at the peak of the IS pantheon.

I like Linux, and BSD, and OS-X, and in some ways they're Unixes. But they're not Unix. Unix is the grand-daddy of modern OS's. It's the shit that other OS's hope to emulate and for the most part do it badly.

This is the Unix philosophy: Write programs that do one thing and do it well. Write programs to work together. Write programs to handle text streams, because that is a universal interface.

- Dave McIlroy [wikipedia.org]

In the words of Hank Spencer [wikipedia.org]: "Those who do not understand Unix are condemned to reinvent it, poorly."

It may yet not be time to write off Unix, and so, to write off Novell. Novell lost the war for the network architecture, but there's some hope they can rise like a phoenix from the ashes and reclaim their place.

Re:No. (1)

timmarhy (659436) | more than 4 years ago | (#31555418)

what makes you think the unix rights they hold are worth $4b?

Novell has a history of blowing it everytime. if unix ever does make a come back i'm sure history will repeat.

Re:No. (1)

symbolset (646467) | more than 4 years ago | (#31555452)

Faith. Perhaps, as you note, my faith is misplaced. I understand your doubt. I have a pretty good record for believing in stuff though, and I'll stick with it. Don't bet on my faith though - mind your gut. This is neither legal nor investment advice. Consult your lawyer, your financial advisor, your psychic and your Yoga instructor for definitive advice.

Re:No. (1)

symbolset (646467) | more than 4 years ago | (#31555692)

There's still a chance they'll hire you to show them the way to the promised land. Or me. Or somebody else with a clue. It could happen.

Re:No. (0)

Anonymous Coward | more than 3 years ago | (#31556598)

Uhm, OS X IS Unix... See http://www.opengroup.org/openbrand/certificates/1190p.pdf
Official Tier One Unix baby! Single UNIX Specification Version 3 (SUS), just as fucking quirky as every other one, but with prettier pictures and no fucking CDE.

Re:No. (2, Insightful)

TheRaven64 (641858) | more than 3 years ago | (#31556890)

Uh, what? First of all, Mac OS X is UNIX - the trademark is not owned by Novell, it is owned by The Open Group and is awarded to any system that is certified as conforming to the latest version of the Single UNIX Specification.

But since you're talking about the UNIX that Novell owns, we're talking about UNIX System V, which was licensed to a lot of people. Novell doesn't have anything like a monopoly on it, because companies like IBM have had it for a long time and been incrementally improving it. I'm not seeing AIX outselling Linux, FreeBSD or Mac OS X, and I wasn't even before the SCO case.

Re:No. (1)

jbengt (874751) | more than 3 years ago | (#31557320)

Novell owns the copyrights to Unix. That's $4B right there.

I like Novell, for the most part.
But before evaluating the $ value of their copyrights for Unix, ask yourself (and the BSD [groklaw.net] guys, for one) just how much of Unix copyrights are held by Novell. (warning: there's no easy [wikipedia.org] answer)

Re:No. (2, Insightful)

larry bagina (561269) | more than 3 years ago | (#31558024)

There are 3 kinds of unix.

One is the concept (and posix interface). I can't think of a single OS from the past 20 years (except classic MacOS and some RT stuff) that isn't heavily influenced by unix/posix here (Windows NT has/had a posix layer). This doesn't do jack shit for novell.

One is trademarked term and certification from The Open Group. OS X, AIX, and Solaris are the only 03 Unix certified OSes, AFAICT. This doesn't do jack shit for novell.

One is the legacy pile of code that novell owns and licenses. Nobody cares about it and it's not worth $4 billion. Oracle will continue to sell Solaris and IBM will continue to sell AIX but that doesn't do jack shit for novell aside from some minor license revenue.

Re:No. (0)

Anonymous Coward | more than 3 years ago | (#31559304)

Unix has some serious proper respect in the geek community, and in the business community that has been deferred due to these ridiculous legal actions. Once they're over, they're over and Unix will reclaim its rightful place at the peak of the IS pantheon

Uh, It's not the SCO crap that's caused the business community to move away from UNIX, it's just that now they can use cheap x86 servers running things like Linux and Windows. We just saw Solaris get crushed off not too long ago for that exact reason. Novell would probably just end up competing with other current UNIX vendors (like Apple and IBM) within the same market share.

Re:Somewhere... (5, Interesting)

tehdaemon (753808) | more than 4 years ago | (#31555402)

So that's what the 2 billion offer was for. The good credit rating. Use it to borrow several billion, Pay yourself the borrowed money in consulting fees, and sell the now inches from bankruptcy company to clueless shareholders in an IPO.

Easy money.

T

Re:Somewhere... (0)

Anonymous Coward | more than 3 years ago | (#31555868)

posting anon so I don't clear mod points...
you have no idea how many people somehow think it's hard to do this to make money, even though it's a common business practice.

Re:Somewhere... (1, Interesting)

shinehead (603005) | more than 4 years ago | (#31555598)

Novell...I didn't know they were still around. When someones says "Novell" I think of Lantastic, Banyan Vines, 100VGAnyLan, etc. NT4.0 ate their lunch and had freaky buttsex with their mom. My first NOS was a pirated copy of 3.11 (20 floppies) running on a 12MB 386DX 33 with a 90MB hard disk. Someone gave me two Arcnet cards (ARCNET!) and I was all set. The first time I saw that F: drive in Windows 3.11 I got so stoked I lived and breathed Netware and was CNA the next month and CNE about six months later. I was having a great time and these were the days when knowing a few DOS commands would get you a gig as sysadmin. I expect another graying veteran will point out that 3.11 needed (officially) 16MB to load. I spent hours tweaking the thing to get it going in 12MB. Now get off my lawn!

Re:Somewhere... (0)

Anonymous Coward | more than 3 years ago | (#31556036)

I'll point out that the Packaged Hell (Packard Bell) that my family bought in '94 ran a 486SX/33 with 4 MB of RAM and it came with Windows 3.11 pre-installed (which ran perfectly fine for the standards of the time). Maybe you're thinking of Windows NT 3.1, 3.5, 3.51? (There was no NT 3.11)

Re:Somewhere... (1)

OnlineAlias (828288) | more than 3 years ago | (#31556744)

4.1 was the first version you could get a CNA for...before that it was only CNE. Your memory is going as you get old...

Re:Somewhere... (0)

Anonymous Coward | more than 3 years ago | (#31555910)

You really need to work on your math skills.

Sympathy for the poor (1, Funny)

Anonymous Coward | more than 4 years ago | (#31554824)

"CEO Hovsepian's total compensation fell 17% to $5.7 million."

The man's struggling! Send Novell your donations.

Why did Novell not Linux-ify older Netwares? (2, Interesting)

Zombie Ryushu (803103) | more than 4 years ago | (#31554830)

Why did Novell not Linux-ify older Netwares? That is to say, make it so that Netware 3.x, and 4.x era IPX and NCP architectures could run on Linux (Think Netware-esque Samba). Back in the day, I could run a program called Mars_new on Linux, and it would permit me to utilize Dos workstations running Netware's Client software. Novell should have done this, make Netware a Linux application, have it go viral to all these orginizations that used Netware.

Re:Why did Novell not Linux-ify older Netwares? (3, Informative)

bbqsrc (1441981) | more than 4 years ago | (#31554956)

Isn't that essentially what OES2 is? Except for the fact it's locked to SLES, that's basically what it is, Netware on Linux.

Re:Why did Novell not Linux-ify older Netwares? (0)

Anonymous Coward | more than 3 years ago | (#31556864)

OES is a group of services that provide the same basic functionality of a Netware server - but it's not like a Netware VM. All the code is native Linux code.

Because they're idiots. (2, Interesting)

khasim (1285) | more than 4 years ago | (#31554964)

Hovsepian is pulling in $5.7 MILLION a year for what?

Why isn't he porting Netware and their other products to GENERIC Linux? Why do they want to tie everything to SuSE?

Because they're idiots who are milking Novell for what they can get out of it while it slides into obscurity.

Re:Because they're idiots. (2, Insightful)

gravos (912628) | more than 4 years ago | (#31555166)

I dunno, anyone who's managed to con their way into making $5.7 mil / year probably isn't an idiot. A slimy, greedy jackass, perhaps, but probably not an idiot.

Re:Because they're idiots. (0)

Anonymous Coward | more than 4 years ago | (#31555426)

Generic, possibly. Only on other Redhat based distributions would this be fairly possible, due to a myriad of reasons. But mostly due to the Sys-V/BSD style split between all variants of Linux.

Re:Because they're idiots. (1)

Kensai7 (1005287) | more than 3 years ago | (#31560108)

What is "generic" Linux? Isn't OpenSUSE generic enough?!

Re:Because they're idiots. (0)

Anonymous Coward | more than 3 years ago | (#31560900)

No :) Generic would mean you wouldn't be broadsided while attempting to set up httpd to use ssl using mostly 'generic' methods (see /etc/sysconfig/apache2). And that your cron job wouldn't be run from a tertiary script that sets environment variables on its own (see /usr/lib/cron/run-crons). And that your system would choose one damned hyphen/underscore/capitalization scheme and stick with it!
( see /etc/sysconfig/suse_register, /etc/init.d/SuSEfirewall2_setup, /etc/init.d/suseRegister).

There are many words I would use for OpenSuSE and SLES, generic is not one of them!

Re:Why did Novell not Linux-ify older Netwares? (0)

Anonymous Coward | more than 4 years ago | (#31554970)

No point in doing that for the older versions.
They are working on adding their services to their Linux. OES.
The product is pretty good.
The message (marketing), not so good so far... We'll see...

Re:Why did Novell not Linux-ify older Netwares? (3, Interesting)

Anonymous Coward | more than 4 years ago | (#31554982)

And how about their filesystem where if the file wasn't overwritten yet, you could simply undelete it, even as a user, including only seeing your own files for undeleting. I know it's possible to do something almost similar with snapshotting, but the default linux filesystems don't support that, and with the filesystems that do the functionality is still not the same (automatic removal of oldest files from snapshots as the disk fills up?), and it's not as easy to setup and use, and it's not integrated with the network filesystem and security as it was on Netware...

Re:Why did Novell not Linux-ify older Netwares? (1)

NOSghoul (1022465) | more than 4 years ago | (#31555430)

One can always tell people who post comments about products they have no clue about.

Novell did "Linux-ify" their platform. It started with NetWare v5.0 back in 2000. OES on Linux was released in 2005. Where have you been for the past 5 years, by Zombie Ryushu?

NetWare v5.0 had a CLIB, Java VM and JVM-based XWindows GUI. It also supported CIFS. By NetWare v6.0, in 2003, they'd added a BASH shell, RPMs, ZLib and a lot more Linux components.

NetWare v3.x had been completely EOLed by 1999, and NetWare v4.x by 2003. Both were tied to IPX - it'd be insane to suggest it would have been worth the time and development effort to re-engineer them with Native IP (NCP over TCP/IP, which was introduced in NetWare v5.x) and the other *NIX-originated features they added to NetWare v5.x and v6.x.

As another poster has pointed out, OES ported the File and Print services traditionally associated with NetWare to a Linux platform. It's been out for years.

Re:Why did Novell not Linux-ify older Netwares? (1)

drolli (522659) | more than 4 years ago | (#31555476)

Thata exactly what i think would have made them much bigger than they are now. Back in the day big organizations had netware installations spanning 1000s of machines. When i think what our university computing center would have payed back then for a officially supported solution to unify unix and netware servers (e.g. if novell delivered their servers based on solaris) while not having the hassle of switching the clients withing a small timespan and having infinite connectivity and hardware-choices on linux/unix it seems to me like a rather stupid move not to push such a thing actively.

Re:Why did Novell not Linux-ify older Netwares? (1)

SEE (7681) | more than 4 years ago | (#31555482)

Why? Lack of vision. Basically, while Linux was emerging, Novell was busy divesting itself of all Ray Noorda's Unix purchases in favor of concentrating on the "core competency" of selling the profitable NetWare, because their stock price was suffering from attempts to expand into other areas. For their lack of vision, they got eaten alive.

The vision of NetWare-on-(Unix|Linux) was continued over at a new company, called Caldera, founded by Novell people and financed by Ray Noorda. That company wound up positioning itself as the "business Linux", selling itself as the logical replacement for installations of SCO Xenix/Unix/UnixWare. To make such transitions easier, Caldera took a bunch of money it got from Microsoft in a lawsuit settlement and bought the Unix business of the Santa Cruz Operation. The trouble was that the SCO Xenix/Unix/UnixWare business it just bought was more profitable than the Linux business it was supposed to feed. And after a CEO change, Caldera switched to trying to concentrate on the "core competency" of selling the profitable SCO products, and threw in some lawsuits to stop other people from following the old Caldera strategy of switching from SCO to Linux. For its lack of vision. Caldera/SCO is now basically dead.

By this time, Novell's mistake had become obvious to Novell. If Caldera had still been following the business plan of former CEO Ransom Love, the obvious thing would have been for Novell to buy Caldera, incidentally re-acquiring many of the rights to UnixWare, and sell (Caldera|Novell) Linux as the heir to both NetWare and UnixWare. But with Darl McBride in charge at Caldrea/The SCO Group, Novell bought SuSE instead, and positioned that as the NetWare successor.

Re:Why did Novell not Linux-ify older Netwares? (1)

Eskarel (565631) | more than 3 years ago | (#31556464)

Because they can't.

Those older Netware versions are written so closely to the hardware that they cannot even be run as virtual machines, they just will not run without direct access to the hardware. That's one of the primary reasons they ditched Netware for OES(which is pretty much what you asked for, Netware systems running on Linux).

The real problem they face is that You cannot upgrade from Netware to OES in situ, you have to create an entirely new instance and, since Novell's products don't modify well in place, export everything out of your old instance and into the new instance. This is a huge amount of work and expense, and most importantly about the same amount of work and expense it takes to migrate your organization to AD and Exchange which I can tell you after working with Novell for the better part of 10 years has reached a point where it is a vastly superior product in every way. Since at the present time the core Novell products(eDirectory and Groupwise) aren't even open source(even if OES runs with a linux core) they don't even have that philosophical advantage.

Novells core products(not their new middleware products which are fairly good) are gigantic proprietary pieces of crap and realistically if you're going to use a giant piece of proprietary software to run your network you'd get a lot better bang for your buck using Microsoft because it works better and they treat their customers better than Novell treats theirs(which should give you a pretty good idea of just how god awful Novell has treated their customers over the last 10 years or so).

Novell are not the good guys. They might be the "getting better" guys, they've moved towards open source, they've moved towards treating their customers better, and they've moved towards making products which integrate with anything at all, but they've got a long way to go, and if they fail along the way it won't be for lack of trying.

The Novell board has rejected this offer, but it'll be interesting to see if their shareholders agree when this goes to them, that bid was well over market valuation and one way or another Novell is extremely unlikely to survive the current recession, if I owned stock I'd be seriously tempted to take cash even for a company with a much better future than Novell.

Re:Why did Novell not Linux-ify older Netwares? (1)

TheRaven64 (641858) | more than 3 years ago | (#31556922)

Those older Netware versions are written so closely to the hardware that they cannot even be run as virtual machines

I suspect that you'll find the main reason for this is that they actually used rings 1 and 2. Netware modules ran at any one of the four privilege levels that the IA32 architecture allows. Most operating systems only use rings 0 and 3, so most VMs don't bother adding support for the other two. There was a project a while ago to port Netware to run on top of Xen, but I don't know what happened to it.

Re:Why did Novell not Linux-ify older Netwares? (1)

SEE (7681) | more than 3 years ago | (#31557548)

Because they can't.

"Portable NetWare" (later called "NetWare for Unix") was running on Unix back in 1989. Yes, in-situ upgrades are a bitch, but there was pretty much no barrier at all to shipping "NetWare for Linux" back in, say, 1996, except for the lack of vision in Novell's executive suite.

Quick! (1)

OverlordQ (264228) | more than 4 years ago | (#31554846)

Let us lose more money so that $2B looks like a better offer!

Re:Quick! (1)

davester666 (731373) | more than 4 years ago | (#31555292)

He wants to try to pull an even bigger 'Yahoo' than Yang did last year [rejecting a bid that values your company more than it possibly could be worth in the next ten years]...

Re:Quick! (1)

OrangeCatholic (1495411) | more than 4 years ago | (#31555474)

Maybe Yang just didn't want to sell out to Microsoft? After all, we'd all have to get new email accounts if he did.

Re:Quick! (1)

jbengt (874751) | more than 3 years ago | (#31557618)

And maybe Yahoo realized that the MS stock offered in the deal would have dropped greatly in price as a result of the deal.

Dummy! Take the money and Run! (4, Interesting)

billstewart (78916) | more than 4 years ago | (#31554854)

There are companies that really should resist being taken over at low-ball prices. I'm very skeptical about any assertion that Novell is one of them; I'd suspect this is a seriously high-ball price, and yes I mean that in several different senses :-)

That doesn't mean it's easy to work at a company that's been bought for too high a price - I used to work for Company N, which was bought by Company A for (IMHO) about 3x what they should have paid, and 2.5x what Company A could have gotten if they'd started out with a low enough offer and ignore Company N's CEO ranting about hostile takeovers. It was a great deal for the stockholders of Company N, but for the company itself, paying 3x what the company was worth meant that the buyers were expecting to get 3x as much revenue from owning Company N as was realistically available. So they went into radical cost-cutting mode, sold off a couple of divisions, tried a bunch of new things using the skills they imagined that Company N would have if a few people from Company A came over to "help", and when that failed, laid off a bunch of people (including me, but I found another job at Company A about when my severance pay ran out, so basically I got a vacation that was long enough I should have goofed off much more seriously than I did.) Eventually they stopped doing most of the things they were bad at (including some of their main product lines that were being eclipsed by the technology boom), went back to doing the things they actually were good at, and got spun off for a stock price that was about what they were actually worth at the beginning of this whole charade.

Re:Dummy! Take the money and Run! (1)

Kjella (173770) | more than 4 years ago | (#31554928)

There are companies that really should resist being taken over at low-ball prices. (...) It was a great deal for the stockholders of Company N,

So... who exactly should resist?

Re:Dummy! Take the money and Run! (2, Funny)

Kotoku (1531373) | more than 4 years ago | (#31554960)

Yahoo! of course! Don't you agree!

Re:Dummy! Take the money and Run! (1)

symbolset (646467) | more than 4 years ago | (#31555436)

Um, no. If somebody offered me all of Yahoo for fifty bucks, a case of beer and a carton of smokes, I'd pass.

Re:Dummy! Take the money and Run! (0)

Anonymous Coward | more than 4 years ago | (#31555204)

So... you travelled back in time to tell us your story of the Novell sellout?

Oh, an ex-NCR guy from the AT&T merger days! (1)

kbahey (102895) | more than 4 years ago | (#31555594)

Oh, an ex-NCR guy from the AT&T merger days in the early 90s.

So, like me you remember Chuck Exley's rants about AT&T's takeover as being "grossly inadequate"?

It has been downhill ever since for NCR, even post spinoff ...

Good move by Novell's part (5, Insightful)

tjstork (137384) | more than 4 years ago | (#31554890)

These days most private equity firms are basically vultures - I offer case in point, Chrysler Corporation. They buy out a firm, gut it, wreck it, and then try and unload a few pieces. Rarely does a private equity firm actually ever improve that which it buys.

Re:Good move by Novell's part (3, Interesting)

ishobo (160209) | more than 4 years ago | (#31555368)

Chrysler was saved by CCM. Daimler was the one that wanted to break apart the company and sell the peices. CCM was serious about reinvigoratinig Chrysler, that is why the lured Jim Press away from Toyota. Chrysler's problem was its recovery coincided with the worldwide recession. At that point, CCM had nowhere to go.

Yeah, DMZ wrecked Chrysler (1)

tjstork (137384) | more than 3 years ago | (#31556916)

Yeah, DMZ bought Chrysler certainly to ruin it.

DMZ basically bought Chrysler because they Chrysler with a looming rear wheel drive and semi-luxury brand that threatened everything DMZ was trying to do with Mercedes in the middle market. Chrysler also had a ton of money in the bank and so DMZ basically took the cash and spent it. The Bush administration should have -never- approved this sale.

CCM stuck the fork in it. CCM has never had a good reputation as a firm that wanted to build anything. What CCM tried to do was basically halt Chrysler's development, which is why they have no new product out there right now, and then, sell it to someone else. It was, for them, like buying something on ebay and selling it again. If CCM were serious about Chrysler, they might have invested in new product development and they simply didn't. Look at how many stories leaked about CCM trying to unload the company. Fiat was always in play but there was also a lot of speculation and conversations with GM.

Re:Good move by Novell's part (1)

tabdelgawad (590061) | more than 3 years ago | (#31558464)

Funny you should use the 'vulture' analogy, because it implies the company taken over is already 'dead'. Even 'vultures' serve an important function in the 'ecosystem', movies like "Pretty Woman" not withstanding!

Hedge fund just wants the IP (0)

Anonymous Coward | more than 4 years ago | (#31554954)

Chances are they'll hire a law firm to sue everyone in sight if/when the acquisition closes, starting with Novell's role as owner of the System V copyrights. Hedge funds and private equity firms aren't interested in risky new development projects.

Vulture Fund (0)

Anonymous Coward | more than 4 years ago | (#31555014)

Vulture Funds need to pay a higher premium than the current market value.

I'm not surprised (2, Interesting)

ClosedSource (238333) | more than 4 years ago | (#31555020)

How many companies can survive on selling a commodity that people can acquire for free? If Linux were to become commonplace even Red Hat might have trouble getting customers to cough up for support they don't really need anymore.

Re:I'm not surprised (1, Insightful)

Anonymous Coward | more than 4 years ago | (#31555180)

On the other hand, one of the reasons why so many people abandoned SuSE was the fact that Novell did the deal with Microsoft. Few people who care about the future of Linux are still willing to give Novell any money. I'm probably just one of many thousands who switched from running SuSE to another distro. Unless they could magically press an "UNDO" button for that deal, they will have as much difficulty selling me ANYTHING as SCO will.

Re:I'm not surprised (3, Informative)

ClosedSource (238333) | more than 4 years ago | (#31555376)

While I'm sure that there were people who did that, I wouldn't draw any broad conclusions from how unpopular that move was on sites like Slashdot.

I'm sure there must be many Linux users who aren't really all that interested in the tit-for-tat OS wars.

Re:I'm not surprised (0)

Anonymous Coward | more than 3 years ago | (#31557932)

I don't think Novell cares much about personal customers anyway, but the reasons I gave up on them was
1) Internet access: No need to buy a Linux distro on CDs/DVDs - for a long time SuSE was the only way you could easily get a comprehensive Linux distribution "offline".
2) Getting used to Linux. When you learned to understand how things are meant to work and have the confidence to do things _your_ way, all those system tools that make things so nice and easy at first tend to get in your way.

Re:I'm not surprised (1)

Ynot_82 (1023749) | more than 4 years ago | (#31555184)

Oh come on,
there's always going to be a market for support
especially in businesses

Most people do not have the skills to administer a system / network of systems
Most businesses are not in the tech field
It is far more cost effective to hire a third party company to provide support than to employ someone in-house

This goes for any service, not just IT

Re:I'm not surprised (0)

Anonymous Coward | more than 4 years ago | (#31555288)

What's
with the weird formatting?

Are you
trying to write
some weird kind of
p
o
e
m
s
?

Re:I'm not surprised (1)

ClosedSource (238333) | more than 4 years ago | (#31555346)

I wasn't aware that Novell or Red Hat offered a service where they do system administration for your in-house servers.

Re:I'm not surprised (1)

perotbot (632237) | more than 3 years ago | (#31558500)

Novell does, it's a service offering... you can effectively hire a MCNE to oversee your shop remotely for 150k per year, and he will basically do whatever you want, remotely.... or you hire novell consulting who will come to your site and do whatever....

Re:I'm not surprised (1)

timmarhy (659436) | more than 4 years ago | (#31555210)

I don't agree with the comments on here that support is going to make money.

do you think MS would be a multi billion $ company based around a support model?

history shows service industries to be the poor cusions of people with something to sell.

Re:I'm not surprised (2, Interesting)

OrangeCatholic (1495411) | more than 4 years ago | (#31555570)

>history shows service industries to be the poor cusions of people with something to sell.

MS probably could not be as big as they are with support contracts. But they have licenses, which is like a support contract where they don't have to do any work.

MS and Oracle are all about IP. Just like support wouldn't work for MS, I doubt selling and licensing IP would work for most smaller software companies. There just isn't the need. Once you decide not to license from the big boys, everything else is cheaper and better.

I mean, have you ever heard of a startup company saying "I'm going to make an even *better* database than oracle and I'm going to charge MORE for it?" That's what would happen in any other industry besides software.

Re:I'm not surprised (0)

Anonymous Coward | more than 4 years ago | (#31555606)

I don't agree with the comments on here that support is going to make money.

How do you explain the fact that RedHat is profitable?

do you think MS would be a multi billion $ company based around a support model?

Society has no goal to have a large IT sector. If the software we want can be developed and distributed by a smaller company, that is called "more efficient" which is a good thing.

history shows service industries to be the poor cusions of people with something to sell.

I expect that over time, the software industry will get smaller and be a smaller percentage of the economy, with more devices running more copies of software. Sort of similar to the way that agriculture employs a much smaller proportion of people than in the past but has higher output. In agriculture this has been the result of efficiencies of production, in software it seems like it will be a result of efficiencies of distribution.

Re:I'm not surprised (1)

timmarhy (659436) | more than 3 years ago | (#31555984)

well, i mean make as MUCH money as having a product to sell. and no duh society has no goal for any industry past providing the goods and services society demands. the difference with agriculutre is that a farm can be run be unskilled workers where IT requires a much much higher degree of skill, and where machines took over the manual labour in agriculture the same is not going to be true for IT - your going to need MORE people working on ever more complex software since there's nothing to take out the grind from programming etc.

Re:I'm not surprised (0)

Anonymous Coward | more than 3 years ago | (#31556380)

well, i mean make as MUCH money as having a product to sell. and no duh society has no goal for any industry past providing the goods and services society demands.

If you meant something different than what you said, well hey, I disputed what you said, not what you meant. So if we can get the required software without a company as big as MS, it's a good thing.

your going to need MORE people working on ever more complex software since there's nothing to take out the grind from programming etc.

Apparently most programmers don't work for software vendors but develop software in house. Their jobs won't disappear. Selling services is profitable, is a more economical distribution method and won't mean programmers have to beg for sustenance. It might make it harder to build a billion dollar business, but also might make it easier to build a million dollar business (as an alternative to having a $80,000 job for the billion dollar business).

Re:I'm not surprised (1)

timmarhy (659436) | more than 3 years ago | (#31556440)

the typical model for programmers not employed in a company is to do contract work. i've done it, it's begging for substenance income..

Re:I'm not surprised (0)

Anonymous Coward | more than 3 years ago | (#31556590)

There's a difference between not being employed in a company and not being employed in a software company, but I'm sure you know that already. I just checked 15 programming jobs in my local area, from the ads it seems 2 or possibly 3 were for software companies. The programmers at RedHat have their source up on the ftp site, yet they do not beg for sustenance.

Re:I'm not surprised (1)

ClosedSource (238333) | more than 3 years ago | (#31558392)

"How do you explain the fact that RedHat is profitable?"

One big reason is that the core technology used to start their business was created by volunteers rather than by burning their own money. (Yes I know they contribute code now but that's quite different from creating your product from scratch).

As I said earlier, there might be room for one big player to provide a "hand-holding" service to less sophisticated Linux shops, but as Linux grows in popularity the need for hand-holding will diminish.

Re:I'm not surprised (1)

TheRaven64 (641858) | more than 3 years ago | (#31556976)

And where would IBM be if their business revolved around support? Oh, it does and they're worth $166bn with around a $10bn annual profit.

There seems to be a misguided view among a lot of Slashdot readers that 'support' means 'answering the phone and telling people what to click on.' It doesn't. Support means taking products, which might be free or might be proprietary, and turning them into something that solves a specific business problem. Business problems are things like 'our departments aren't communicating well' or 'we aren't reordering stock quickly enough to track sudden demand spikes'. Solutions may involve email programs and databases, but these are just parts of the solution. Integrating them and training the users to make best use of them are the other parts. Sometimes, modifying the software to do exactly what the user needs, rather than almost what the user needs, is a part of it. All of these things come under the heading of 'support.'

Re:I'm not surprised (1)

ClosedSource (238333) | more than 3 years ago | (#31558454)

IBM is a rather unique case. They have been around a long time and still benefit from their historical reputation. They still make a lot of their money from selling hardware and software. A lot of their "support" service is geared toward selling IBM stuff.

I don't think you could model a new company to emulate IBM and be successful.

It seems people keep pointing to special case companies like IBM and Red Hat as proof that the service model works. How many start-up companies are growing based on the service model?

Re:I'm not surprised (1)

TheRaven64 (641858) | more than 3 years ago | (#31559266)

Well, I can point to a dozen startups within a couple of miles of here that are doing well using that model. My father's company grew from nothing in 1982 to having a half a million pound turnover when he left in the mid '90s using the service model. People aren't giving you these examples because you probably won't have heard of them.

Your argument is somewhat like saying 'you can't make money creating a restaurant that sells good quality food,' pointing to McDonalds as evidence, and when people list very successful well-known restaurants as counter-examples claiming that they are exceptions.

Re:I'm not surprised (1)

jbengt (874751) | more than 3 years ago | (#31557736)

history shows service industries to be the poor cusions[sic] of people with something to sell.

Citation needed.

In my limited personal experience (working almost 30 years for consulting engineering companies) service industries make more money for far less investment than product-producing companies.

Re:I'm not surprised (5, Interesting)

phantomfive (622387) | more than 4 years ago | (#31555216)

Enterprise services are big business, IBM make $13 billion profit every year selling crappy software that does what people need.

Novell has a huge asset (besides their pile of cash), and that is their customer base. If they can create an attractive way for their customers to move forward, they have strong potential for profitability in the future. All they need to do is figure out what their customers need, stick it in a pretty package, and the sales will basically take care of themselves.

My understanding (from talking to employees at the company) is that Novell is a very bureaucratic company, and it is hard for new ideas to get backing inside the company. If they want to succeed they will need to overcome their inertia and become more nimble. There is no reason they can't do this: if they die, it will be because they got caught in their own tarpit and didn't have the will to change.

Re:I'm not surprised (0)

Anonymous Coward | more than 3 years ago | (#31558636)

They need to move out of Utah. Most of the talent doesn't want to live there.

Companies like this... (4, Informative)

Yaa 101 (664725) | more than 4 years ago | (#31555126)

Companies like this is exactly what Elliot et al. wants, liquidize and suck out the billion dollars and throw away the empty shell and all the workers, these hedge funds are the scum of this earth

Re:Companies like this... (0)

Anonymous Coward | more than 4 years ago | (#31555236)

as an ex'er you have no idea how right you are. For these guys, it's purely about the money nothing else.

Re:Companies like this... (1)

clarkkent09 (1104833) | more than 4 years ago | (#31555494)

A company can only survive for so long making a loss of $200M on a gross revenue of $800M as Novell did last year. I don't know all the details of Novell's finances and maybe the management has a great plan to save it but in general there are cases where its better to put a moribund company out of it's misery sooner rather than later.

Re:Companies like this... (1)

cerberusss (660701) | more than 3 years ago | (#31557700)

suck out the billion dollars and throw away the empty shell and all the workers, these hedge funds are the scum of this earth

The current management is also busy sucking out the billion dollars, and sooner or later, they'll have an empty shell, too.

Problem: Old Execs (0)

Anonymous Coward | more than 4 years ago | (#31555246)

Novell could have really dug in to the Linux market. They waited too long and they continued with their same old marketing and licensing. It's a sinking ship.

Take the money now (1)

mc6809e (214243) | more than 4 years ago | (#31555348)

before the next crash.

Re:Take the money now (0)

Anonymous Coward | more than 3 years ago | (#31557446)

before the next crash.

It's good advice to take the money before the next crash, but if you think the next crash is coming anytime soon, you don't know SHIT about the economy.

Hint: only the idiots are claiming we're still on a recession. Everybody else is riding the recovery all the way to the bank.

SCO/Yarrow Link? (1)

seeker_1us (1203072) | more than 3 years ago | (#31555774)

I wonder if this could be traced to SCO and Yarrow. If Novell ended up going away, SCO would be free to try their questionable legal tactics again to get money from Linux users. Just tinfoil hat speculation.

Re:SCO/Yarrow Link? (1)

peragrin (659227) | more than 3 years ago | (#31556638)

possible but SCO wouldn't be free as the issue would have to be dealt with first, and IBM still has SCO in it's cross hairs.

actually once SCO is decided Novell could suddenly be worth more.well unix assets as valued by SCO are only worth about 1 million that could change if clear ownership is shown.

Novell has made their own mess. (3, Interesting)

miffo.swe (547642) | more than 3 years ago | (#31556216)

Back when Novell bought SUSE they wore lining up to be the most important company of all. They had a core service, eDir, that let them connect Linux, Windows and Mac computers together and collaborate in a coherent way. They could be the spider in the net, connecting it all in the background. Microsoft would never even touch that market with a ten foot pole so they wouldn't compete directly with MS.

Then came a series of very bad decisions like only (barely) support their own Linux version. kind of made their core service suck since you couldnt use it with any other Linux distribution than SUSE. They made a strange decision to use mono for their services. Things that was pretty reliable, like Zenworks completely blows with mono. Zenworks 10 is something your lucky if you get working, if you get a function realiable, go buy a lottery ticket. They made DSFW, domain services for Windows. A hard complicated and cumbersome way of running an AD. Why on earth would i want to run AD even crazier than on Windows?

The patent agreement with Microsoft was the real letter of resignation. They had the technology to capture a untapped market. The customers existed everywhere (what company today dont have Linux machines all over?) and they could help them with very little effort because their core services was ready to go and much of them already worked on Linux. It was just a matter of compiling and testing.

My theory is that upper management knew this and still opted for a quick buck. They sold their shareholders out in the long run, killing the company in the process.

Re:Novell has made their own mess. (1)

Antique Geekmeister (740220) | more than 3 years ago | (#31556786)

The patent agreement with Microsoft was fascinating: it cost them Jeremy Allison, who I rather thought was the real reason Microsoft _wanted_ to trap SuSe in a web of patent issues. Even with the obvious failures of the deal to provide the open source publicity and support for cooperation with Microsoft's vague and undocumented patent claims, it was still well worth the money to Microsoft to leave Novell struggling and confusing the market with Netware, and driving Jeremy Allison away and slowing Samba development.

Down with Novell (1)

lucm (889690) | more than 3 years ago | (#31556278)

I will never forgive Novell for Groupwise. Pure evil in a red and white box.

Re:Down with Novell (0)

Anonymous Coward | more than 3 years ago | (#31557906)

Why is Groupwise so evil? Setting up a Groupwise system has always been pretty easy. Get your GWIA, MTA, and POA running and you're in business. Up until recently Outlook was nowhere near as easy to implement.

Novell, Linux, Netware, and Schools (1)

mosburger (189009) | more than 3 years ago | (#31556410)

It seems like public schools everywhere (up here in Maine, U.S. anyway) still use Netware for everything. I've always thought it would make sense for Novell to migrate them to a Netware/SuSE solution. The kids would win, because (hopefully) a Microsoft-free solution would be a lot cheaper for the schools, and Novell wins by keeping customers who will otherwise inevitably leave their platform as it ages.

Novell NOT worth that till.... (1)

rec9140 (732463) | more than 3 years ago | (#31557268)

they DUMP miguel mono boi and his crap!

I wouldn't touch them with a 10000ft pole. Huge legal liability with that mess.

Plus it would take so much to clean up SLES and OpenSUSE to restore it back to its previous stature as a top of the line distro.

When you dump miguel mono boi, then you might be worth more than US $0.000001/cents.

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